Introduction to Business EconomicsMTP Jul 24Question 673 of 209
All Questions

What is economic planning?

Options

AIt refers to Central planning authority.
BIt refers the planning of agricultural production
CIt means development in the seller's market
Dprocess through which targets are being achieved as per need & means of the economy
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Correct Answer

✅ Option d — process through which targets are being achieved as per need & means of the economy

All Options:

  • AIt refers to Central planning authority.
  • BIt refers the planning of agricultural production
  • CIt means development in the seller's market
  • Dprocess through which targets are being achieved as per need & means of the economy

Detailed Solution & Explanation

• Economic planning is a systematic process where a central authority or government makes conscious decisions about the allocation of resources to achieve specific economic goals. • Option (D) is the correct answer because it accurately defines economic planning. It emphasizes that planning is a "process" aimed at achieving "targets" based on the "needs and means of the economy." This encompasses setting objectives (like growth, employment, poverty reduction) and devising strategies to utilize available resources (land, labor, capital) efficiently to meet those objectives. This definition aligns with the core concept of economic planning as a deliberate effort to guide economic activity. • Option (A) is incorrect because while a "Central planning authority" is often involved in economic planning, it is not the definition of economic planning itself. The authority is the *agent* of planning, not the *process* or *concept*. Economic planning can exist even with varying degrees of central authority involvement. • Option (B) is incorrect because planning agricultural production is just one specific aspect or sector that might be included in broader economic planning. Economic planning is much wider in scope, covering all sectors of an economy, not just agriculture. • Option (C) is incorrect because "development in the seller's market" refers to a market condition where sellers have more power due to high demand or limited supply. This is a market characteristic, not a definition of economic planning. Economic planning aims to influence market conditions, but it is not defined by them.

About This Chapter: Introduction to Business Economics

Paper

Paper 4: Business Economics

Weightage

5%

Key Topics

Meaning, Scope, Price Mechanism

This chapter lays the groundwork for understanding Business Economics as a discipline. It covers the meaning, scope, and nature of economics — including key distinctions like Microeconomics vs Macroeconomics, Positive vs Normative economics, and the fundamental economic problem of scarcity. Students learn how businesses use economic principles for decision-making in a competitive marketplace.

View Official ICAI Syllabus

Exam Strategy Tip

Focus on definitions and distinctions between concepts. Questions often test whether you understand the difference between Micro and Macro, or Positive and Normative statements.

Related Comparison Tables

Microeconomics vs Macroeconomics: The Complete CA Foundation GuidePositive vs Normative Economics: Fact vs Opinion

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